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ETH Zurich analyzed the three largest economies in the EU – Germany, France and Italy. The result: Europe’s engines are stuttering.
Author: Manuela Siegert and Benita Vogel
From June 6th to 9th, EU citizens will re-elect the European Parliament. The mood is already noticeably heated in several countries. At the same time, major member states are struggling with economic problems.
European elections 2024
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The European Parliament elections will take place in all EU member states between June 6th and 9th, 2024. It is the only directly elected transnational assembly in the world.
A total of 720 members of the European Parliament will be elected, 15 more than in the last election. Most MEPs will come from Germany (96), followed by France (81) and Italy (76). Fewer than 10 MPs come from Slovenia, Latvia, Estonia, Cyprus, Luxembourg and Malta.
The European Parliament currently has 705 members in 7 political groups. The president is Roberta Metsola.
The election takes place according to the proportional representation system. This means: the more votes a party gets, the more MEPs it sends to the European Parliament. The European elections take place every five years.
Source: European Parliament
Heiner Mikosch from the KOF economic research center at ETH Zurich says: “We are currently in an economic dip in all major European economies.” There are also home-made problems.
To the study
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Legend: KOF
The international economic team at the KOF economic research center at ETH Zurich has carried out a compact analysis of Germany, France and Italy in its country study. The focus is on the current economic situation and the biggest challenges in each country.
The KOF will publish the four-page study on May 10, 2024.
His institute analyzed the three largest economies in the EU, Germany, France and Italy.
Italy: Aging Society
Legend: Keystone / Gregorio Borgia
According to the analysis, Italy is developing only weakly. Among other things, the country has a high national debt. Heiner Mikosch says: “As the interest burden increases, it becomes less and less affordable. It limits the state’s flexibility in budget planning.”
Second big problem: Italy is aging. The country is not alone in this in Europe, but in Italy this fact is particularly problematic. Mikosch explains: “The big difference to Germany, for example, is that there is also a brain drain, that skilled workers are emigrating and not immigrating like in Germany. It is a big challenge for the whole of Italy to get enough skilled workers for the industry.”
France: High debt
Legende:
Keystone / Thibault Camus
France has also accumulated high levels of national debt. What that means depends on inflation.
“If interest rates remain high and the interest burden increases or remains high in the long term, then that will be a real problem for France and for the European Union,” says Mikosch. France could put pressure on the European Central Bank to cut interest rates or mutualize debt.
Countries like the Netherlands and Germany are strictly against it. “That would lead to a major political dispute, against the background of the emergence of right-wing or, let’s say, right-wing populist parties in Europe. That would be a very explosive situation.”
Germany: standstill
Legende:
Keystone / Sebastian Gollnow
Germany had become heavily dependent on Russian energy in the past and felt the consequences of Russia’s war of aggression on Ukraine most acutely. This placed a heavy burden on German industry.
In addition, there are technological changes in the automobile sector, which is important for the country: “It is a big question as to how the German automobile industry can keep up with its competitors from China and the USA,” said the analyst.
Germany is also hesitant in terms of economic policy. Reforms from the 2000s have been partially weakened. Heiner Mikosch says: “That may be positive from a socio-political perspective, but it limits potential growth.”
The conclusion
But Heiner Mikosch doesn’t want to paint things blackly. In his eyes, the European Union has a decisive advantage: “Compared to the USA and China, Europe is the continent where the greatest attention is paid to the balance between economic dynamism and social balance.”
Not losing sight of its citizens could be the EU’s long-term competitive advantage.